BREAKINGVIEWS-Ben Bernanke is no holiday price Grinch

(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)

By Richard Beales

NEW YORK, Nov 26 (Reuters Breakingviews) - Easy money isn't
making this year’s holiday festivities too pricey. The cost of
the "Twelve Days of Christmas" gifts, excluding swans, is up a
below-average 2.6 percent. A Thanksgiving meal was under 1
percent more expensive in 2012, against a modest 2.2 percent
rise in U.S. consumer prices in the year to October. Federal
Reserve Chairman Ben Bernanke's policies aren’t bringing
inflation that could dim the spirit of the season.

The cost of a 12-day, 78-gift collection in PNC Financial
Services' tongue-in-cheek Christmas Price Index is up nearly 5
percent. That rises to more than 6 percent when including the
song's repetitions, totaling 364 presents. But the bank's core
measure, which excludes the volatile and expensive "seven swans
a-swimming" item, is up considerably less than the 4.4 percent
average increase seen since 1986.

The cost of a less esoteric shopping basket is more
relevant. A 16-pound bird was the biggest contributor to the
slight rise in the tab for last week's Thanksgiving feast to
just under $50 for 10 people, by the American Farm Bureau
Federation’s reckoning. But at around 3 percent, the increase in
the cost of turkeys was modest compared to swans, geese and
French hens (although less meaty partridges, turtle doves and
calling birds were unchanged in price). Milk, cream and other
staples were cheaper.

Executives from Wal-Mart Stores (WMT.N) talked a lot about
"price investments" - meaning discounts - when the company
released quarterly earnings earlier this month, and said
inflation in some product lines is still countered by deflation
in others. More scientifically, U.S. prices overall aren't
taking off. Neither the headline CPI nor the core version
excluding food and energy, which rose 2 percent in 12 months to
October, look worryingly high or show any clear upward trend in
the context of other 2012 readings.

The Fed's ultra-low interest rates and gigantic bond-buying
programs are surely buoying bond prices and probably stocks,
some commodities and other asset prices as well - perhaps
including large, infrequently-traded birds. What's not obvious
from either anecdotal or broad indications is any serious effect
on day-to-day prices. That may come in future years, but for
this holiday season at least Bernanke is no price Grinch.

- PNC Financial Services on Nov. 26 released its annual
Christmas Price Index, pegging the cost of the gifts in "The
Twelve Days of Christmas" at $25,431.18 this year, an increase
of 4.8 percent over 2011. PNC attributed the increase to a
drought-induced surge in the cost of feed for large birds.

- Excluding the volatile and expensive "seven swans
a-swimming" component, the index is up 2.6 percent over last
year, well below the average since 1986 of 4.4 percent.

- The American Farm Bureau Federation on Nov. 8 said the
retail cost of a classic Thanksgiving menu was 0.6 percent
higher this year than in 2011, at $49.48 for 10 people.

- The U.S. consumer price index rose 2.2 percent in the year
to October.

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